Piracy: A Threat to Maritime Security and the Global Economy

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By Lawrence P. Farrell Jr.

One of the least understood global security threats is the ongoing struggle to contain piracy off Somalia, in the Gulf of Aden and the Indian Ocean.

These are not the only venues where piracy is practiced, but they are the most visible and, lately, problematic. It is not understood well because it doesn’t directly affect the daily lives of most people. Piracy is a major concern for shippers, insurance agencies, underwriters, crews and cargo owners. It does ultimately affect all consumers because it can drive up the price of goods, including oil, other commodities and manufactured products.

Some readers might recall the capture of the Maersk Alabama and the imprisonment of its captain. Navy SEALs were dispatched to rescue the skipper and demonstrated their impressive skills.

Shipping companies have pretty much been on their own to cope with piracy. Remember that pirates morphed from fishermen whose grounds were encroached upon and ended up resorting to the much more lucrative piracy business.

As time wore on, national navies took up the cause, with loosely coordinated patrols to waive off pirates. This cooperation was enhance by reporting mechanisms and armed guards on ships. The pirates’ response was to gain better intelligence and to use mother ships to extend their reach by hundreds of miles.

The response to all this was to provide armed guards on commercial vessels. Most guards are from private maritime security companies, and some came from host militaries. This was the case in Italy, where Italian Marines served aboard Italian-flagged carriers.

It is estimated that 60 percent of commercial carriers now have armed guards. And in 2012, reported incidents have dropped dramatically. The question is whether this will be a lasting trend.

An incident involving ships guarded by Italian Marines illuminates some of the issues. As pirates operated out of Somalia, the shippers were advised to hug the Indian coast when coming and going to the Persian Gulf and Suez Canal. This took them through Indian fishing grounds and posed conflict with Indian fisherman, many of whom were armed.

In February, the Enrica Lexie encountered what were perceived to be pirates. The Marines fired warning shots, and reported the incident to their command in Bari, Italy. Later, aboard an Indian ship, the St. Anthony, two crewman were killed by fire from a tanker. There were several tankers in the vicinity of the incident, but only the Enrica Lexie reported pirate contact. Indian authorities sent out cutters and helicopters to urge the Lexie to port in India. India subsequently arrested two Italian Marines.

The Italian and Indian governments are at loggerheads over the issue, and resolution appears far off, as each side presents conflicting evidence.

This incident, among others, has had a dampening effect on international cooperation and reporting of piracy incidents.

During “Countering Piracy Week” and the Hanson Wade Combating Piracy Conference in London, in October, the chief of the International Maritime Bureau was quoted by news media as saying that vessels with private security are not reporting attempted attacks that other vessels were reporting before. Owners might hesitate to report attempted attacks in areas they travel in frequently for fear of more attacks.

So the problem is that cooperation is breaking down. Carriers and navies need information about attacks to counter the pirates, but a wave of under reporting is occurring.

One reason is the fear of liability — both personal and contractual — if a guard is held legally responsible for shooting at and perhaps killing or wounding either pirates or innocent fisherman — even though they may also be armed and look like pirates.

Next is the potential loss of business if cargo owners believe shipping to be unsafe. Also, insurance rates might be raised if insurers perceive increased risk. The possibility of a detour to port to report and fill out paperwork results in unplanned delays and potential loss of future contracts. Then there are those who may be engaged in marginally legal operations or carrying questionable cargo who are unlikely to provide reports.

Shippers complain that the system is a one-way street. They provide information, but get very little feedback on other reporting or trends.

Michael Frodl, of C-Level Maritime Risks, estimates that under reporting is significant. In July, August and September, there were at least two reported incidents, but Frodl estimates there were probably 12 to 14 incidents during that time.

The upshot for the United States and allied nations is that lack of cooperation in combating piracy will cost us all and make a tough job even tougher. It will drive commodity prices up, and further fragment international cooperation on critical matters.

Remember that one of the roles of the Navy is to secure freedom of navigation.

As the piracy challenge is clearly beyond the capability of national navies alone, collaboration with the shippers is essential to getting control of this problem. Without their cooperation, a solution is not possible, and the problem gets worse. Better management and understanding of this issue are essential. If left uncontrolled, it will affect every nation. Trade in goods — both manufactured and raw materials — and maritime access are at risk. Lacking international agreement to address the problem could, in the worst cases, lead to conflict.

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